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Monday, April 18, 2016

Could a Crisis Cripple Your Freelance Business?

Survival tips for Today's Savvy Entrepreneur

After waiting about a month for a client to pay me on a (5 day net) creative project, the check came in the mail. I did the “happy dance” ‘til I was dizzy!
Getting paid would allow me to catch up on some of my obligations as I was already struggling in a struggling economy.

I began to figure out my bills and hope for a few left over dollars to do a
mini-splurge at the local thrift store.
My joy was short-lived.

Before the ink could dry on the check, the client contacted me. She asked me not to cash it, because the funds would not “officially” be available for another week due to an unanticipated emergency. Needless to say, I was shocked and a little rattled.

Mind you, the check was already late, and based upon my income projections, I promised to pay several of my vendors. Her not honoring her word prevented me from honoring mine. And...well, you get the point.

A few weeks before that, a publisher with whom I had enjoyed a long-term business relationship, came down with a bad bout of the flu; as a result, he extended his apologies for not being able to issue checks because he was bed-ridden for two weeks.

Life happens.
That goes without saying. But just because you’re a “small” business owner doesn’t mean you should operate “small time” in the way you conduct your business or handle crisis management. In fact, you should be more
prepared for mishaps due to fewer resources. The buck stops with you!

Not providing for “the worst case scenario” can cause irreparable damage and affect your ability to compete with larger businesses; ultimately costing you in terms of client confidence and bottom line objectives.

After all, folks figure if you can’t handle your business challenges, why should they trust you with theirs? Which I'm sure you'd agree is a valid point.

Whether you manage a staff of one or 101, here are a few business practices you should employ to cover your assets and protect your bottom line.

1. EXPECT THE BEST BUT PREPARE FOR THE WORSTDo you have a back up if your files are destroyed on your hard drive? Systems and people in place if you become ill or need to take a vacation? Are your records well kept if someone needs to temporarily assume your duties, or establish a paper trail of your activities? Could your business recover if you lost a key client? Could you independently update your site if your "tech guy" took a walk? These are all points to consider in your strategic planning. Always have a plan B.

2. HAVE AN EMERGENCY FUND...AND THEN SOME
"Save for a rainy day” has become more than a cliché; in today’s economic climate it’s as crucial as a commandment! Experts differ in the exact amount an “emergency fund” constitutes---some say the equivalent of three months salary, others advise six months. Apply it to your individual lifestyle and circumstances, then act accordingly. Today.

3. EMPOWER YOUR HELP (WHEN APPLICABLE)
Hire competent contractors and staff and give them the training and resources to act independently in resolving small issues. It can help them to develop personally and professionally, and improve the efficiency of your organization. Funds tight? Hire an intern.

4. ESTABLISH SUPPORTIVE ALLIANCES
Don’t perceive all your peers as a competitive threat. Seek out owners with whom you have a compatible work ethic and similar visions and values, and find ways to enhance each other. This can be accomplished through online groups or networking associations dedicated to your particular field or trade. LinkeDin is a good starting point.

5. HONOR YOUR WORD
Many small blog owners and freelance operations go to great lengths to overcome perception issues and convey a professional image. They invest in elaborate web sites, purchase fancy business cards, and go the whole nine yards to recruit clients and impress associates. But all these measures can be in vain if they establish a reputation of repeatedly not honoring their word-- whether it’s to a client, a vendor, a business partner, or employee. Never over promise and under deliver. Don’t say one thing and do another. Always strive to keep your end of the bargain because ultimately your livelihood affects others.6. KEEP ACCURATE, UPDATED RECORDS

6 comments:

Having a "Plan B" in place is crucial. I've learned a few of these lessons the hard way as well, and it continues to dictate my processes now. I sometimes feel like I am overdoing it with my paper trails, but it has remedied a situation more than once. Great advice Jen, thank you!

Savvy tips indeed. In today's economic climate everything trickles down. If advertisers don't pay, then the freelancers don't get paid in a timely manner. Be prepared must be more than a motto. Excellent advice, as usual.

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About Me

Professional, veteran freelance writer, columnist, Pro Blogger, and "Ghost" writer with about 700 publishing credits, reflecting an array of topics, in multiple genres. My work has appeared in popular, award-winning sites and national magazines, for over a decade.
I'm the former Senior Editor of Mahogany Magazine.
I also serve on the Board of Directors of C.W.A.